House Speaker frontrunner talks to The Brazilian Report

Arthur Lira is the favorite to win the House Speaker election. Photo: Wilson dias/ABr Arthur Lira is the favorite to win the House Speaker election. Photo: Wilson dias/ABr

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Today, House Speaker favorite Arthur Lira speaks to The Brazilian Report. Private sector companies decide to pull out of controversial vaccine deal. New Manaus mayor could face arrest for handling of health collapse.

Exclusive: The Brazilian Report speaks to House Speaker frontrunner

On Monday, Brazilian lawmakers will elect a new House Speaker and Senate President. While anything can happen until all ballots are counted, the race in the lower house is shaping up to be less competitive than it seemed. Backed by President Jair Bolsonaro, Congressman Arthur Lira has pulled away as favorite against Baleia Rossi — who was handpicked by incumbent Speaker Rodrigo Maia to succeed him.

  • The president’s engagement with Mr. Lira’s candidacy is proving to be decisive. In an explicit display of horse-trading, Mr. Bolsonaro has reportedly promised to hand out budgetary grants and executive appointment to his allies, in order to help Mr. Lira cross the finish line.

Why it matters. Besides his agenda-setting powers, the Speaker is the only person in the country who can accept impeachment requests against a sitting president. On Wednesday, Mr. Lira answered ten questions submitted by The Brazilian Report’s Brasília correspondent Débora Álvares:

</p> <p><strong>The year began with a budget stalemate. As Speaker, how would you move to approve the 2021 budget in a timely manner, and how can the government gain more agency over public spending, given that over 90 percent of the budget is already earmarked by law?</strong></p> <blockquote class="wp-block-quote"><p>We have entered 2021 without a budget because of the current Speaker&#8217;s centralizing behavior. He failed to set up the <a href="https://brazilian.report/newsletters/brazil-daily/2020/10/30/squabbles-over-2021-budget-could-throw-brazil-into-shutdown/">Congressional Budget Committee</a>, but I believe we can do that immediately after the election, as it remains as the most pressing matter in Congress&#8217; hands.</p><p>There is also the <a href="https://brazilian.report/power/2019/11/06/paulo-guedes-wants-completely-reform-brazilian-state/">Fiscal Emergency PEC</a> [a constitutional amendment bill which suspends salary increases and tax benefits for civil servants if credit operations overtake capital expenses over the course of a year]. We are being crushed between the federal spending cap and laws creating mandatory expenses that allow for little wiggle room. </p><p>That is especially the case in 2021, as we face a health crisis without being able to use the so-called &#8220;<a href="https://brazilian.report/newsletters/brazil-weekly/2020/05/11/breaking-down-brazil-coronavirus-war-budget/">War Budget</a>&#8221; [a parallel budget used in 2020 for coronavirus-related spending].</p></blockquote> <p><strong>When it comes to reforms, which would be your priority: overhauling civil service or Brazil&#8217;s tax system? And which tax reform would you champion?</strong></p> <blockquote class="wp-block-quote"><p>Congressional priorities are established by the council of party whips. I believe the budget should be voted on first, followed by the Fiscal Emergency PEC. Then, the administrative reform, which could signal to economic agents in Brazil and abroad that the country is choosing the path of fiscal balance. The <a href="https://brazilian.report/newsletters/brazil-daily/2021/01/05/tax-reform-sparks-protests-from-sao-paulo-rural-producers/">tax reform</a> should come later, as it is more complex and will put different interests in conflict. But all of that could be done by the first half of the year.</p><p>We shall weigh up all interests involved and, as was the case with the pension reform, [Congress] must protect those who are the most vulnerable.</p></blockquote> <p><strong>Are you in favor of privatizing major state-owned companies? If so, which ones?</strong></p> <blockquote class="wp-block-quote"><p>We must assess which model of <a href="https://brazilian.report/business/2018/11/09/brazil-privatization-austerity/">privatization</a> is most suited to different sectors and is in the national interest. Should the government put a company on the stock market and sell part of its shares? Or should it modernize a company to increase its market value before selling it? Each individual case brings its own issues. The House must not be an obstacle to these debates, but rather encourage them.</p></blockquote> <p><strong>If you win the Speaker race, how will the House act to solve pandemic-related problems — especially the health collapses we have witnessed in multiple regions?</strong></p> <blockquote class="wp-block-quote"><p>We must always prioritize life. Brazil has a strong public healthcare network with resilient and brave professionals. But the House must never be defensive and act in a way to sabotage [government efforts]. We could be in another stage of this crisis if the Speaker position hadn&#8217;t been used to set the electoral stage in 2022. But our duty now is to create conditions for health providers and supply all Brazilians with a vaccine. </p></blockquote> <p><strong>Should the emergency aid program return? If so, how would you propose financing it?</strong></p> <blockquote class="wp-block-quote"><p>During the entire year of 2020, [my group] proposed a new cash-transfer program that would give special treatment to poor Brazilians who don&#8217;t receive government aid at this moment. We were never heard by the current leadership of the House. I support a solution that respects the public spending cap.</p></blockquote> <p><strong>Speaking of the spending cap, should it be revised?</strong></p> <blockquote class="wp-block-quote"><p>The public spending cap is an important limit which must be respected as it sends a message that Brazil wants to preserve economic stability. That should foster a favorable business environment and improve employment conditions, which in turn will raise people&#8217;s revenue.</p></blockquote> <p><strong>But how can Congress be more proactive in creating employment conditions?</strong></p> <blockquote class="wp-block-quote"><p>We must pass structural reforms and make up for lost time. Brasília can neither stop nor get in the way of the rest of the country.</p></blockquote> <p><strong>The bill to give the Central Bank formal autonomy has stalled in the House. Will you treat it as a priority?</strong></p> <blockquote class="wp-block-quote"><p>I will never set the congressional agenda according to my own preferences. Instead, I will share this responsibility with the council of party whips so the agenda may be a democratic one. If the council approves it, then a bill will go to the floor immediately.</p></blockquote> <p><strong>Our electoral system has been challenged by President Bolsonaro himself. Do you plan to cater to his wishes and reform it?</strong></p> <blockquote class="wp-block-quote"><p>I trust the electronic voting system and I think Brazil is an example to be followed in avoiding voter fraud. But if we must analyze alternatives, the Electoral Justice system could develop pilot projects in small areas to observe how effective other systems could be.</p></blockquote> <p><strong>Is President Bolsonaro&#8217;s handling of the pandemic justification for his impeachment?</strong></p> <blockquote class="wp-block-quote"><p>I have said time and time again: impeachment is not a campaign banner for a candidate for House Speaker. These matters are in the hands of the incumbent, Rodrigo Maia, who has received dozens of impeachment requests but hasn&#8217;t pushed any of them forward. If I am elected, I will treat the issue with independence, relying on my peers for a decision.</p></blockquote> <hr class="wp-block-separator"/> <h2>Companies abandon confusing vaccine sweepstakes</h2> <p>A group of 72 major Brazilian companies had initiated talks with shareholders of AstraZeneca — including investment giant BlackRock — for the purchase of 33 million vaccine doses. The move had been endorsed by the government, providing that half of the shots were destined to the public healthcare system, and the rest were used to vaccinate the companies&#8217; workers.</p> <ul><li>But major backlash from the public and the scientific community (who saw this as a way to cut the vaccine line) has forced a U-turn from many of the companies, including mining giant Vale and state-controlled oil firm Petrobras.</li></ul> <p><strong>Meanwhile … </strong>The São Paulo-based Butantan Biological Institute has given the federal government an ultimatum: if it doesn&#8217;t confirm the purchase of 54 million doses of the Chinese-made CoronaVac, the shots will be exported to neighboring countries.</p> <ul><li>The move is strange, especially considering that Butantan works under the state government of São Paulo. Governor João Doria increased his political profile with the success of the CoronaVac development, despite pushback from President Jair Bolsonaro, his political nemesis. Exporting vaccine doses at a time when Brazil faces shortages would be political suicide for a man with presidential ambitions.</li></ul> <hr class="wp-block-separator"/> <h2>Prosecutors call for arrest of Manaus mayor for pandemic crisis</h2> <p>Less than a month after taking office as the mayor of Manaus, David Almeida could be forced out. State prosecutors in Amazonas have requested his removal and arrest for irregularities in how vaccination efforts have been carried out in the city — multiple city officials have &#8220;cut&#8221; the vaccine line, which led to courts suspending further vaccinations.</p> <p><strong>Why it matters. </strong>Multiple investigations have been opened to assess the responsibility of public officials in the Manaus health collapse — even Health Minister Eduardo Pazuello will be put under the microscope.</p> <p><strong>Reaction.</strong> After Mr. Pazuello came under scrutiny, the government reacted with an investigation of its own, targeting oxygen-maker White Martins for allegedly engaging in &#8220;abusive commercial practices&#8221; that were detrimental to consumers. As Manaus hospitals ran out of oxygen cylinders, dozens of patients died of asphyxiation.</p> <ul><li>The company, however, had warned the government of an imminent shortage one week prior to the collapse. Still, President Jair Bolsonaro said his administration was unaware of the crisis and that he has done &#8220;more than he was obliged to do&#8221; during the crisis.</li></ul> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <ul><li><strong>Oil and gas.</strong> Reuters <a href="https://www.reuters.com/article/us-petrobras-brazil-tender-exclusive/exclusive-samsung-hyundai-daewoo-prepare-for-petrobras-oil-platform-tender-sources-idUSKBN29X0HJ">reports</a> that three consortia, including Asian shipyards, plan to compete to build Petrobras’ first two in-house oil platforms in more than seven years. These consortia are separately headed by three South Korean giants: Samsung, Hyundai, and Daewoo. Offers are due on Monday, February 1. The competition marks Petrobras’ comeback as a key market for Asian shipyards.</li><li><strong>Carnival.</strong> After <a href="https://brazilian.report/tourism/2021/01/26/show-must-not-go-on-for-rio-de-janeiro-carnival/">Rio de Janeiro</a>, another iconic summer destination has canceled all Carnival festivities in 2021: the state of Bahia. Governor Rui Costa even suspended the public holiday itself in an attempt to avoid clandestine parties. Piauí and Ceará, two states in the Northeast, have done the same.</li><li><strong>New variant. </strong>The highly-transmissible new variant of the coronavirus — initially found in Manaus — has been <a href="https://static.poder360.com.br/2021/01/OMS-nova-variante-Brasil-8-paises.pdf">spotted in eight countries</a> in Asia, Europe, and North America, according to the World Health Organization. In Manaus, the so-called &#8220;P.1. variant&#8221; accounts for 85 percent of all new infections and is believed to have caused the current health collapse in the north of the country. Over the past week, only the U.S. reported more new <a href="https://brazilian.report/coronavirus-brazil-live-blog/">Covid-19 cases</a> than Brazil.</li><li><strong>Bolsonaro.</strong> In an expletive-filled rant, President Jair Bolsonaro criticized reports about his administration&#8217;s spending on food products — in particular the USD 2.91 million used to buy condensed milk. &#8220;Get fucked, you shitty press. All these condensed milk cans are to shove up your asses,&#8221; he <a href="https://www.poder360.com.br/governo/bolsonaro-diz-que-leite-condensado-e-para-enfiar-no-rabo-da-imprensa/">said</a>, during a steakhouse luncheon, to a cheering crowd that included Foreign Minister Ernesto Araújo.</li><li><strong>Diplomacy.</strong> Vice President Hamilton Mourão suggested to reporters on Wednesday that the Foreign Minister could be <a href="https://politica.estadao.com.br/noticias/geral,mourao-afirma-que-ernesto-araujo-pode-ser-demitido,70003595906">removed from his duties</a> following the congressional leadership election on February 1, &#8220;which would call for a rearrangement of forces,&#8221; he said. President Bolsonaro has yet to show any indication that he is ready to ditch Ernesto Araújo, and Mr. Mourão&#8217;s words were interpreted as an attempt to distance himself from Mr. Bolsonaro.</li><li><strong>Watch the VP.</strong> When calls for impeachment are made, the Vice President is an important figure to keep an eye on. In 2015 and 2016, for instance, Michel Temer quickly <a href="https://brazilian.report/power/2018/07/25/important-vice-president-brazil/">seized upon the political crisis</a> faced by President Dilma Rousseff to present himself as a pro-austerity alternative, publicly breaking ties with her. While Mr. Mourão is nowhere near making this sort of <a href="https://brazilian.report/podcast/2018/08/08/podcast-brazil-vice-president-election/">rupture</a>, he has made himself widely available to the press — always ready to offer more moderated inputs on the issue of the day, as opposed to the president&#8217;s bluster and bravado.

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